BAE Systems has announced that, with short prospects of more orders when the two aircraft carriers for the UK Ministry of Defence are completed,it is looking to close one of its yards and will announce its decision by the end of the year.
BAE Systems owns three yards dealing with surface ships, two on the Clyde, at Govan and across the river at Scotstoun; and one at Portsmouth n the south coast.
It also owns a fourth yard, centred on submarines, at Barrow -in-Furness in Cumbria. Its building hall there – the Devonshire Dock Hall – is the largest in Europe,
However, it is the surface shipping yards that seem to be under threat, with Barrow having work on the rest of the new nuclear powered but conventionally armed hunter-killler Astute class submarines and no doubt hoping that the UK goes ahead with Trident II , with new submarines to be built to carry it.
The Clyde yards have completed their work on the first, Queen Elizabeth aircraft carrier sections and are already working on the same two blocks for the second carrier, the Prince Charles.
Several issues would suggest that it will be one of the two Clyde yards to be closed.
There is the logic of taking out one of the two Scottish yards rather than closing Portsouth, its sole yard in England.
The possibility of Scottish independence is another issue. The drivers here are the imperative to maintain a high-level skills base in England, which would be lost if they closed Portsmouth; and the simple economics of keeping the UK pound in the UK in hard times rather than putting contracts to an independent Scotland.
This would not be an anti-Scottish move but a straightforward one of looking after the rest of the UK first – and Scotland would do the same were the positions reversed.
Then there is the convenience of Portsmouth, in the heart of the great south coast centre of the Royal Navy.
The Scottish Government should be preparing hard now for the fact that, at the year end, the news may be bad for Scotland.
With labour costs rising in competitor markets, it is a question of keeping the facilities and the capability alive in the Clyde against the times, which may not be too long coming, when there will be a more even competitive picture.
Scotland – independent or not, cannot afford to lose more of what is left of its heavy engineering base, in skills, in jobs, in GDP and in prestige.